Verification

Embed Video

Gray urges uranium industry to invest in new production

PERTH (miningweekly.com) – Federal Resources Minister Gary Gray has called for greater involvement in the uranium industry, urging industry players to commit to further spending.

“Industry needs to commit to the further development of new projects to ensure that our uranium production meets global demand, particularly as demand for uranium in 2013 is likely to surpass supply,” he told the Australian Uranium Association on Thursday.

The Minister pointed out that Australia had the world's largest known uranium reserves, with 33% of the world's reasonably assured resources. Furthermore, the country was also the world's third-largest uranium producer, behind Kazakhstan and Canada.

“However, we cannot rest on our laurels. In 2012, production from our uranium mines rose more than 17% to over 8 000 t. However, this was well below production levels between 2003 and 2009, when yearly production ranged between 9 000 t and 11 000 t,” Gray said.

He told industry participants that they had to recognise and embrace the opportunities that existed for producers, as global energy demand increased.

“Post-Fukushima, we have seen uranium reach its lowest spot price in five years, at around $41/lb. However, the two fundamental drivers of nuclear power, namely increased energy demand from growing populations and the need to reduce greenhouse-gas emissions, remain changed,” he said.

Gray pointed out that nuclear power currently provides around 13% of the world's electricity, through 435 reactors operating in 30 countries. In 2013 alone, these reactors would require over 66 000 t of uranium.

“But with current global mine production at only 55 000 t, the shortfall is largely being met by secondary sources, such as the reprocessing of highly enriched weapons-grade uranium from the former Soviet republics. This programme is set to end this year, and it will be interesting to see the effect this will have on the market,” the Minister noted.

He added that, worldwide, a further 66 nuclear reactors were under construction, with two-thirds of these new builds in Asia, and several more reactors in the pipeline.

“China and India alone have a total of 226 reactors slated for construction over the next two decades. The significance of growing demand in China and India cannot be over-emphasised. By 2034, demand for electricity in China will have grown by more than the current electricity demand of the US and Japan combined.”

The Minister said on Thursday that Australia currently supplied around 22% of China’s uranium demand, and negotiations have started with India on a bilateral safeguards agreement, which would pave the way for significant exports in the future.

Meanwhile, Gray noted that Australia’s uranium oxide production was expected to increase by 17% a year, reaching nearly 21 000 t by 2019/20, with all production expected to be exported.